Ron Siegel

Asymmetric all-pay auctions with interdependent valuations

I show that a unique equilibrium exists in an asymmetric two-player all-pay auction with a discrete signal structure, correlated signals, and interdependent valuations. The proof is constructive, and the construction can be implemented as a computer program and be used to derive comparative statics. I also characterize the set of equilibria when a reserve price is introduced.

Contests with productive effort

I consider competitions in which, conditional on winning or losing, the effort exerted by a competitor does not necessarily decrease his payoff. This happens, for example, in competitions for promotions in which workers are intrinsically motivated, and in research and development races in which better performance implies a higher payoff from winning. I characterize players’ equilibrium payoffs in closed form, thereby generalizing Siegel (Econometrica 77(1):71–92, 2009) payoff result to contests in which players’ payoff functions are non-monotonic.

Asymmetric Contests with Interdependent Valuations

I show that a unique equilibrium exists in a two-player all-pay auction with asymmetric independent discrete signal distributions and asymmetric interdependent valuations. The proof is constructive, and the construction is simple to implement as a computer program. For special cases, which include some private value settings, common value settings, and symmetric players, I derive additional properties and comparative statics. I also characterize the set of equilibria when a reserve price is introduced.

Matching and price competition: beyond symmetric linear costs

Bulow and Levin’s (2006) “Matching and Price Competition” studies a matching model in which hospitals compete for interns by offering wages. We relax the assumption of symmetric linear costs and compare the pricing equilibrium that results to the firm-optimal competitive equilibrium. With linear and asymmetric costs, competition in the pricing equilibrium may not be localized, but all other qualitative comparisons of Bulow and Levin (2006) hold. With non-linear and symmetric costs workers’ average utility in the pricing equilibrium may be higher than in the firm- optimal competitive equilibrium. With asymmetric and non-linear costs, firms need not choose scores from an interval in a pricing equilibrium, which may make competition even less localized.

Head Starts in Contests

This paper studies equilibrium behavior in a class of games that models asymmetric multiprize competitions in which players’ costs are not necessarily strictly decreasing. Such costs accommodate head starts, which capture incumbency advantages, prior investments, and technological differences. I provide an algorithm that constructs the unique equilibrium in which players do not choose weakly-dominated strategies, and apply it to study multiprize all-pay auctions with head starts. A comparison to the standard all-pay auction shows that the strategic effects of head starts differ substantially from those of differing valuations.

Adverse selection and unraveling in common-value labor markets

We investigate a common-value labor setting in which firms interview a worker prior to hiring. When firms have private information about the worker’s value and interview decisions are kept private, many firms may enter the market, interview, and hire with positive probability. When firms’ interview decisions are revealed, severe adverse selection arises. As a result, all firms except for the highest-ranked firm are excluded from the hiring process.